Profiting From RadioShack Corporation’s Coming Demise

George Leong: Retail is tough, especially the bricks-and-mortar end (i.e. physical stores). Blockbuster and Circuit City are examples of two major companies that plummeted into the abyss after failing to recognize the strong moves long ago towards online shopping with the growing popularity and accessibility of the Internet, based on my stock analysis.

Now, it looks like we are seeing clues that yet another major retailer may soon follow suit. My stock analysis indicates that electronic retailer RadioShack Corporation (NYSE:RSH) could be the next big retailer to collapse.

I can personally tell you that RadioShack is well past its prime. There’s an outlet near me, and I can honestly say that I have only been there a few times in the 14 years I have lived in the area. Shoppers looking for TVs, gaming consoles, mobile devices, and the like usually venture out to the Best Buy Co., Inc. (NYSE:BBY) that is located within a mile of this RadioShack.

However, Best Buy is still not totally safe, based on my stock analysis. Under the leadership of Hubert Joly, the electronic retailer has improved, but the company continues to face massive competition from both other physical stores and online sales especially.

I’m not sure I would be running to buy Best Buy at this time, and the stock market appears to be in agreement with my stock analysis, as the company is about 28% off its high.

My stock analysis suggests that Best Buy is not dead, as the stores are still popular as a place to physically shop; however, the issue I see is that electronic retailing has become extremely competitive based on price. Even if you happen to find what you are looking for at the local Best Buy or via their online store, many consumers will still shop around for better prices online. Now Best Buy guarantees the lowest price, but I’m not that convinced this can prevent shoppers going elsewhere, based on my stock analysis.

And in addition to the online rivals, my stock analysis indicates that Best Buy and RadioShack are also facing competition from the likes of Wal-Mart Stores Inc. (NYSE:WMT) and Amazon.com, Inc. (NASDAQ:AMZN).